Asia’s Iran oil buys start to rise after nuclear deal

* Top four buyers take 1.25 mln bpd from Iran in Jan

* Imports confirm tanker data showing rising Iranian shipments

* Second payment on frozen oil receipts due on Sat

Asian buyers increased purchases of Iranian crude by 22 percent in January from a year ago as the grip of sanctions imposed since 2012 loosened following a landmark agreement in November to curtail Tehran’s nuclear programme.

The OPEC member’s oil sales in January to its four biggest buyers topped the 1 million barrels per day (bpd) where Western powers wanted to hold shipments to maintain pressure on Iran to end the disputed programme.

China, India, Japan and South Korea together bought an average of 1.25 million bpd last month, government and industry data showed. They bought 1.03 million bpd in January a year ago.

Increased crude exports from Iran may cap oil prices after other OPEC producers such as Saudi Arabia and Iraq raised output to fill the gap created by the Western sanctions and outages in North Africa and the Middle East.

“Iranian exports are increasing and that means more supplies are coming into a market that is already well supplied,” said Jonathan Barratt, chief executive of commodity research firm Barratt’s Bulletin in Sydney.

“We are currently at the top end of the price range.”

The import figures confirm data from sources who track tanker movements that show Iran’s exports have been rising since the nuclear deal was struck in Geneva.

Last month, the United States and the European Union began following through on promised sanctions relief for Iran on oil exports, trade in precious metals and automotive services as the November agreement went into effect on Jan. 20.

As part of the relief, Iran has begun to receive payments from its top buyers on $4.2 billion in frozen oil receipts, with the second instalment of $450 million due on Saturday from South Korea.

Japan made the first payment of $550 million on Feb. 1, and India has said this week it is ready to pay $1.5 billion to Iran to clear part of its backlog on oil payments.

Talks on reaching a final settlement to the decade-old dispute over Iran’s nuclear programme have made a “good start,” European Union foreign policy chief Catherine Ashton said last week.

Toughened sanctions placed on Iran in 2012 more than halved its crude exports, costing it billions of dollars a month in lost oil revenue.

The West says Iran’s nuclear ambitions are aimed at making a weapon. Tehran says it only wants to develop nuclear power.

IRAN’S ASIAN BUYERS

Japan, the world’s fourth-biggest oil importer, purchased 210,517 bpd from Iran last month, compared with 239,085 bpd in January a year ago, trade ministry data showed on Friday.

China, Iran’s largest oil client, took 564,536 bpd of the crude last month, up 82 percent from January 2013.

That jump – partly linked to data distortions as companies tend to book cargoes in advance of a week-long holiday that began on Jan. 31 this year – brought China’s imports back to levels before Western sanctions were applied in early 2012.

China may buy more Iranian oil in 2014 as state-run trader Zhuhai Zhenrong Corp is negotiating a new condensate contract, Reuters has reported.

India’s imports from Iran more than doubled last month from December, reaching the highest since February 2012, as one state refiner returned from a three-month break as a buyer.

India’s oil purchase from Iran in January surged to 412,000 bpd, up from 189,100 bpd in December and 44 percent higher than a year ago, data compiled by Reuters showed.

The big rise last month brings India’s imports from Iran over April-January to about 201,000 bpd, still a decline of 26 percent from the same 10 months a year earlier.

That’s below India’s target of 220,000 bpd for the fiscal year that ends March 31, but if imports hold close to the January levels, earlier cuts could be wiped out.

South Korea imported about 65,000 bpd in January, a third of what the country purchased a year earlier.

China, India, Japan and South Korea together cut their purchases of Iranian crude by 15 percent in 2013 to an average of 935,862 bpd.

When one understands the intricacies and the systematic implications of Peak Oil then the conclusion is Iranian oil supply is currently very important. Most here know here we are faced with a descending energy gradient. This energy brick wall and energy trap is likely in 5 to 10 years depending on the Peak Oil dynamics. The supply is potentially there 5 to 10 years out. We are in a complex global financial system. This system is now in a new normal of debt driven measure “globally” but most notably US, China, Japan, and Europe. This arrangement is unsustainable and can only be considered a bubble. A financial crisis will be the beginning of the end of this “new normal” global system at this point. The financial bullets of stabilizing this system post future contraction/collapse have been used and will not be effective as future financial tools. There is no managed de-growth to an alternative potentially healthy system resembling the current status quo BAU. The system has developed to a point where the local is dependent on the global support as well as the national on the global financial system. There is no decoupling of nations or regions in regards to local support systems and global finance. The unintended consequences of an attempt to reform this reality will lead to contraction/collapse. With this said we will need Iranian oil and a healthy Iranian oil industry to help mitigate the effects of the PO. The status quo BAU has a limited life span now. The local up needs more time to mitigate a collapsing global economic system. We may have a short window of economic difficulties forcing a local response. If the degree of contraction is too strong and or the duration too long we may not see any kind of stabilization of what we all have come to know as a normal standard of living. We have to recognize the implications of a failing global support system on our local support. We need the top down to become less relevant in its local destroying practices. In this case we need both Iran and the West to quiet this potential game ender of status quo BAU. A war in the ME Persian Gulf is a game ender. We need 5 years minimum to establish local seeds. An economic crisis with some remaining BAU resources could force a change and achieve some local lifeboats for stability. We can have no game enders of war, wmd use, and nuk/bio poison releases. There is no idea how bad this correction will be but the potential with bad decisions is a game ender. Many if not most of us reading my post will die in in short order with a game ender. The local may have a chance to grow out in a greatly reduced economy and population this growth will be over many years. Nothing will happen to status quo BAU is over.

GregT on Fri, 28th Feb 2014 4:24 pm

Iran’s central bank is state owned and operated, this will not do. The recent easing of sanctions is more about central bank control than nuclear weapons production. The central banking cartels have one more kick at the can for world domination. Time is running out.

“Tehran’s move to free its central bank from direct government control and to resume working with international banking authorities may have prompted the U.S. to ease sanctions, whether or not Iran complies with restrictions on uranium enrichment.”

Good article Greg. On the hand we have the open-ended warfare by the uS ands it puppet states against Iran with the so-called ‘nuclear weapons trope’ dangled as the(officially approved) reason. Then you have, another war the real war, lead by the IMF, BIS and WB,to destroy the state owned bank of Iran, by turning it into a wholly owned subsidiary of the Us banking cartel. Surely Iran must know that bending knee to the IMF is toxic, and is in many ways, more deadly than all the WomD the US has parked just offshore of Iran. Lets hope they do know this, if they allow the IMF to take over-or privatize ANY of their banking system, then N.Y. and Tel Aviv and London will rule Iran again, just as surely as if US terror troops occupied the country directly.